A number of environmentally-friendly initiatives and products have been unveiled by food companies in the lead up to Earth Day, which is marked today (22 April). But how strong is mainstream consumer interest in green issues? Ben Cooper examines the degree to which environmental concerns are shaping consumer motivation in the US food market.
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The launch of various environmentally-friendly products and initiatives in the run up to Earth Day shows that green issues have far from disappeared from the agenda for food companies, in spite of the possibility that consumer interest in sustainability has dwindled amid the downturn.
However, the suggestion that consumers may be setting aside ethical concerns as the recession bites assumes a significant degree of awareness to begin with, and research from the Hartman Group in the US would appear to put that assumption in doubt.
While the Hartman Group’s recent report, Sustainability: The Rise of Consumer Responsibility, revealed that three quarters of consumers surveyed bear in mind social and environmental factors in their purchases, in reality knowledge and awareness of these issues, among mainstream consumers at least, is fairly sketchy.
Indeed, only 56% of consumers surveyed said they were familiar with the term ‘sustainability’. While this was up from 54% in 2007, it is arguably lower than might have been expected. Furthermore, fewer than 25% of consumers surveyed could name a sustainable product. This, the report suggests, offers a significant opportunity to companies launching products with sustainability benefits, suggesting that there is a willingness among consumers to explore the area.
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By GlobalDataIt is that burgeoning interest which food companies are looking to tap into with new products, while also improving their overall environmental profile. Over the past week or so, we have seen environmental initiatives or new products unveiled by US retailer Giant Food and General Mills, PepsiCo, Finnish food group Raisio, US organics grocer Whole Foods Market and Del Monte.
However, the Hartman research suggests that companies face a challenge in making environmental issues truly relevant to mainstream consumers. According to Laurie Demeritt, president and chief operating officer of the Hartman Group, environmental issues have less resonance with consumers than other factors in the “ethical space”.
Other criteria, such as personal and health benefits offered by more sustainable products, or some of the social factors, like animal welfare, weigh in more heavily with mainstream consumers than broader environmental factors such as carbon footprint, according to Hartman’s research.
The better-for-you factor plays particularly strongly, Demeritt says, citing milk without hormones and antibiotics as an example. As broader environmental concerns do not play such a prominent part in consumer rationale, it is logical to assume that consumer motivation in this area will be more susceptible to recessionary pressures. “That personal, health benefit is one they [mainstream consumers] are going to hold on to longer, than a more holistic benefit around the environment which is a little harder for them to see personal benefits in.”
However, that is not to say that efforts in the environmental field are wasted in the current climate. But factors that are closer to home and more relevant to consumers, such as perceived personal health benefits, are more likely to influence purchasing behaviour.
“The environmental issues are further out,” says Demeritt. “If you ask them [consumers] if they care about them then of course they are going to say yes but when they’re actually making purchase decisions it’s much more based on what’s closer to them.”
An interesting illustration can be found in the bottled water market. It has been widely assumed that the decline in bottled water sales has been in no small part due to environmental concerns among consumers. However, Hartman’s research suggests that mainstream consumers are shying away from bottled water on health grounds rather than for environmental reasons.
That said, environmentally friendly packaging on a product, Demeritt says, can send out positive cues about a company, and could therefore be of value even if the majority of mainstream consumers are some way from appreciating all the issues behind such green initiatives. “If you have a product that you want to promote the personal benefits of, it certainly doesn’t hurt to have packaging that is going cue them to the fact that you are one of those what they are calling good companies,” she says.
In this context, the recent decision by PepsiCo-owned Frito-Lay to move towards biodegradable packaging for its SunChips brand is an interesting case to point. This month, the company is changing the outer layer of the packaging on 10 ½ oz size SunChips snack bags to a compostable, plant-based renewable material called polylactic acid (PLA). The company also announced that by Earth Day 2010, it would have a package for SunChips snacks with all layers made from PLA, making the pack 100% compostable. The comment by Frito-Lay North America’s vice president for packaging research and development, Jay Gehring, that “packaging is clearly the most visible interaction consumers have with Frito-Lay’s brands” appears to bear out Demeritt’s contention.
The prominence given to Earth Day in PepsiCo’s announcement suggests how this is being used by companies to promote green initiatives. However, Hartman’s research did not find a huge amount of awareness of Earth Day among mainstream consumers. “We don’t hear a lot from consumers about Earth Day,” Demeritt says.
However, in general Demeritt believes the ‘halo’ effect provided by taking initiatives on the environment should not be underestimated, even if consumer awareness on environmental issues still remains relatively limited. “We certainly believe that environmental messaging does provide a good halo for the rest of your company and products,” Demeritt says. “So even if consumers aren’t all the way there yet it still could play a role in how they think about the company.”
